A New Low in Mortgage Rates

August 6, 2010

Daily Mortgage Updates

Doug Katz Mortgage Broker 6 Aug 2010 – As I begin this week’s commentary, I think to myself “does it make sense to write the same thing week after week?” I feel that I risk becoming like Ben Stein in Ferris Bueller’s Day Off droning on to a disinterested audience, but, then again, this continued low rate environment offers a wealth of opportunity for those embarking on a transaction. So, without further ado, we have officially hit another low point with Freddie Mac reporting that rates have reached the lowest point since they began tracking rates.

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What is Keeping Mortgage Rates Low and Will it Continue?

The source of this extended low mortgage rate environment is the continued demand for seemingly safe investments like Treasuries as opposed the riskier stocks. This increased demand makes mortgaged back securities, which are bundles of mortgages bought and sold by investors, a very desirable investment. In short, investors are still exceedingly cautious and are unwilling to risk losing money. They still want to earn some gain on their assets, but not at the expense of a major loss. While there have been glimmers of hope, nothing has been encouraging enough to bring money en masse into stocks. This could change, but conventional wisdom is against it.

Should I Lock My Mortgage Rate?

I am recommending my clients lock in the short-term as the risk definitely outweighs the potential of securing a better rate. Greed in this situation could bite you in the rear if we see any type of stock rally. Fifteen or more days out, however, I do see some benefit in vigilant floating. For rate watchers, the official employment numbers come out tomorrow, which will likely have some influence in the mortgage market.

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About Doug Katz

As the Senior Mortgage Banker and Sales Manager for Chicago Bancorp, Doug not only originates loans for his personal business, but also oversees affiliations with banks and other financial institutions that depend on Chicago Bancorp to meet their client’s lending needs. In this role, Doug directs the day-to-day mortgage sales operations of over 25 branches in a multitude of Chicagoland’s diverse communities. He brings to these relationships a wealth of industry experience and a dedication to an exceptional client experience that has established Chicago Bancorp as Chicago’s pre-eminent mortgage solution providers. Prior to joining Chicago Bancorp, Doug attended and graduated from West Point. Upon graduation, he was commissioned as an officer in the United States Army Artillery, where served 5 years in numerous roles and in various deployments include service in Kuwait. In addition to his Bachelor’s Degree from West Point, Doug holds an M.B.A. from Loyola University Chicago, where he was also inducted into the Beta Gamma Sigma Honor Society. He also served as President for the West Point Society of Chicago from 2003 to 2005 and still serves on the Board of Directors. When not working, he spends his time with his wife and three children in their hometown of Oak Park, as well as pursuing his passions for fitness, cooking and the banjo. Doug can be reached by phone at 312.738.6079, by email at doug@chicagobancorp.com, on his own blogs, BankerDoug.com and Vet Money Matters. He's also on LinkedIn.

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